It’s a fact, food delivery is how people eat in 2020, and people are ordering delivery more and more by the day. By 2025 it is projected that the food delivery business could grow into a 467 billion dollar business. Sites like Ubereats, Grubhub, and Postmates have made food delivery accessible to millions of people but at what cost? Here is a breakdown on how these food delivery apps make money off of customers and restaurants, as well as a more affordable option for people looking for less red tape and less dishonesty.
Restaurants: In an expose on Today, representatives from Ubereats stated that they charge anywhere from 15-30% of the restaurants listed price for food delivery. However Forbes stated that almost all restaurants are charged 30% of their menu’s listed price, even big time chains.
Customers: In a New York Times Expose, Ubereats charged a customer ordering two six-inch subs a $4 delivery fee, a $2.22 service fee, and misc $3 fee! That’s almost 10 dollars in fees on a 15 dollar order and that didn’t include tip or taxes. These fees are not only expensive, but dishonest and rely on splitting up the bill into a series of tiny fees in order to confuse customers into thinking they are getting a deal. The price of menu items listed on their apps is also 25% higher than the items listed at the restaurant! All told, customers should expect to pay up to 91% markup on any order listed on Ubereats compared to just picking it up from the store.
Restaurants: Grubhub at the very least confirmed a specific amount with Today, they charge a restaurant a processing/fraud protection fee (4%), a marketing fee (15-20%), and a 10% delivery fee if they use Grubhubs’ delivery service. While the transparency is admirable, Grubhub still charges anywhere from 29-34% in fees!
Customers: In a similar breakdown done by the NY-times, Grubhub performed a little better, charging a $ 2 delivery fee, and $ 1.29 service fee on their order. Grubhub however also has amarkup their menu prices of certain items listed on their apps, charging up to 37% more on their items than at the restaurant. All told Grubhub, the least expensive app, still charges 30 -37% on their food deliveries compared to picking it up from the restaurant.!
Restaurants: Postmates refused to comment on a specific amount in the today expose, but many restaurants have reported paying 30% commission on every delivery. While this includes fees like marketing and processing, the fact of the matter is that these fees are far more than any restaurant can afford to operate.
Customers: Postmates finds itself somewhere in the middle of the ridiculous fee game. Postmates charges a prorated service fee that can go anywhere 2 to 10 dollars, a $ 2.99 delivery fee, and a price markup on their menu that goes up to 25%. While not as bad as Ubereats, Postmate customers should still expect to pay 40 – 60% more than what it would cost just to pick up an item from the restaurant. All before taxes and tip!
How GoGoo.Me does things differently!
There are food delivery apps that look at this situation and think how they can do better. GoGoo.Me, a community-focused delivery app in Los Angeles uses a fee structure that is far more honest and stable with their restaurants and their customers. Our restaurant partners are charged a flat rate that includes all of our features and support. GoGoo.Me customers are charged only $ 5 for a delivery and extra per mile for delivery over 2 miles but that’s it. No confusing “service fee” no price markups on our menu items. What you see on our menu is what you would see on the menus of the restaurant.
GoGoo.Me was started by 3 compassionate dads who wanted to bring a solution to several different issues with the current delivery service market. GoGo.Me saw (1) hurting restaurants who were facing strict restrictions and closures due to the CoVid-19 pandemic, and (2) saw that the current delivery systems were overcharging both the customer and the restaurant, and they wanted to provide an alternative for restaurants to deliver their delicious food to the amazing people of Los Angeles.
GoGoo.Me knows that customers feel cheated by food delivery, which is why we will never rely on menu manipulation, fee breakdowns that don’t make any sense, and flat out lying about how much things cost to make money. We know that by focusing on making sure our community gets great food in these times, that we can make money the old fashioned way, with great service and great prices.
Try GoGoo.Me today. You’ll love it.